A Balanced Budget Amendment: Still a Terrible Idea

By Ramesh Ponnuru -
Feb 18, 2013

Frustrated by the persistence of
large deficits, and alarmed by the long-term gap between
spending and revenue, congressional Republicans are promoting a
constitutional amendment to require balanced budgets.

Representative Trent Franks, an Arizona Republican, tells
me that an amendment is a simple, easily understood way “to put
this government back in its proper role.”

The amendment has long been a popular idea. It is also a
bad idea, which is why it’s a good thing it isn’t going to come
close to being ratified.

There are several competing versions. Some Republicans
favor the “clean” amendment they supported in the 1980s and
1990s, which just requires balance. Others fear this would lead
to tax increases. They want an amendment that requires balance
and also caps spending at 18 percent of gross domestic product
and requires a two-thirds vote of Congress to raise taxes.
That’s the version that all Senate Republicans have agreed to
co-sponsor. Some House Republicans have mused about yet a third
version, which would require the government to balance its
budgets over the course of an economic cycle rather than in any
year.

Bad Economics

The senators’ amendment would make the federal government a
smaller share of the economy than it has been since the 1950s.
The chief economic argument against it is that it would make
recessions worse. When recessions hit, they increase deficits:
Revenue falls while spending on unemployment benefits (among
other things) goes up. A strict balanced-budget rule would force
spending cuts or tax increases at times of economic weakness.
The Federal Reserve could theoretically offset these effects,
but you’d want to be pretty confident beforehand that it would
do the right thing.

The economic argument assumes the amendment would be
enforced. It isn’t clear how it would be. If the government were
projected to run a deficit, would the courts step in to cut
spending or raise taxes? The senators’ amendment rules out
judicial tax increases but leaves the door open for court-
ordered cuts in defense spending or Social Security benefits.
The result would be a major expansion of judicial power over
American life, brought to us by the party that has rightly
warned against the growth of that very power for decades.

When pressed on the enforcement question, proponents
sometimes say that a sense of shame will keep Congress from
violating the amendment. (Really, that’s what they say.) The
Senate Judiciary Committee made a similar point in a 1993 report
on a proposed amendment: “In their campaigns for re-election,
elected officials who flout their responsibilities under this
amendment will find that the political process will provide the
ultimate enforcement mechanism.”

If shame and political pressure could solve our debt woes,
they already would have. If the budget is unbalanced, any future
congressman will be able to say that he supports a remedy:
cutting this or that program or raising taxes. There’s nothing
in the amendment that would force congressmen to agree on just
which solution to adopt, or to pass any of them. Instead of
blaming one another just for deficits, they would blame one
another for deficits and for violating the Constitution.

The polls may also be misleading Republicans about the
political merits of a campaign for an amendment. Democrats will
say that the Senate Republicans’ version of the amendment would
gut Social Security and Medicare (which would, after all, be one
way to comply with it). Without any plan of their own to balance
the budget right now, Republicans won’t be able to counter that
attack.

Wasting Time

The other political risk for Republicans is that the time
they waste making the case for an ineffectual amendment is time
they don’t spend persuading voters that they have any ideas that
would help families balance their own budgets.

And it would indeed be time wasted. All the Republicans and
22 of the Democrats in the Senate, plus all the Republicans and
56 of the Democrats in the House, would have to vote for the
idea to send it to the states. Then three-quarters of the states,
which have grown increasingly dependent on federal deficit
spending to keep their own budgets in balance, would have to
ratify it. The amendment isn’t going anywhere.

Voters already know that Republicans are concerned about
the deficit. Exit polls during the 2012 presidential election
showed that voters favored the Republican candidate, Mitt Romney,
over President Barack Obama by two percentage points as a
deficit-cutter. The 15 percent of voters who said the deficit
was their top issue backed Romney 2 to 1.

The Republican Party has a lot of problems. A fight over
the Balanced Budget Amendment would, at best, solve one it
doesn’t have.

(Ramesh Ponnuru is a Bloomberg View columnist, a visiting
fellow at the American Enterprise Institute and a senior editor
at National Review. The opinions expressed are his own.)